AMERICAN SOCIETY FOR ENGINEERING EDUCATION

High technology investments are a rapidly growing segment of business capital expenditures. The questionnaire responses presented in this paper provide information on the capital investment decision processes currently being used for high technology projects. Respondents indicate that the capital evaluation techniques used to justify high technology investments are similar to those used for other types of capital projects and that high-tech projects must meet normal requirements for project acceptability. Respondents specified that a wide variety of factors, some quantified and some not quantified (such as quality control and reduced lead time), are included in their decision process. While there is general satisfaction with the procedures used for project justification, the relative newness of these investments suggests that there is a need to gather more detailed information about this type of capital decision.     

Quantification and Persuasion in Managerial Judgement*

Accounting involves assigning numbers to events — quantifying them. Conventional wisdom holds that putting numbers to an argument enhances its persuasive power. There is, however, little scholarly evidence to support or refute this claim, in accounting or elsewhere. In this paper, we develop an original process‐based model of how quantification influences persuasion. We posit that including a high‐quality quantified analysis in a proposal enhances its persuasive power by increasing both the perceived competence of the proposal preparer and the perceived plausibility that a favorable outcome could occur. Under some conditions, however, quantification also encourages criticism of the details of the proposal, which potentially offsets these effects. We experimentally test implications of our model in a managerial decision setting, investigating conditions in which quantification is more and less likely to result in criticism of the quantified proposal and, thus, less and more likely to be persuasive. We also test the model itself using structural equations methods. Results largely support the model, which should prove of value to researchers interested in the effects of quantification on judgements and to those interested in persuasion.     

The Behavior of the Interest Rate Differential Between Tax-exempt Revenue and General Obligation Bonds: A Test of Risk Preferences and Market Segmentation

This paper presents evidence that the yield differential between revenue bonds and similar general obligation bonds varies contracyclically with the level of economic activity. The evidence also indicates that significant investor-borrower induced market segmentation exists in the municipal bond market. An increase in the relative demand by commercial banks for tax-exempt securities and/or an increase in the supply of revenue bonds relative to the supply of general obligation bonds increase the yield spread between the two classes of debt. These findings were the result of a series of empirical tests with both macroeconomic and microeconomic data.     

Auditor Mindsets and Audits of Complex Estimates

Auditors experience significant problems auditing complex accounting estimates, and this increasingly puts financial reporting quality at risk. Based on analyses of the specific errors that auditors commit, we propose that auditors need to be able to think more broadly and incorporate information from a variety of sources in order to improve audit quality for these important accounts. We experimentally demonstrate that a deliberative mindset intervention improves auditors’ ability to identify unreasonable estimates by improving their ability to identify and incorporate into their analyses contradictory information from diverse parts of the audit and improving their ability to think critically about the evidence. We perform additional analyses to demonstrate that our intervention improves auditor performance by causing them to think differently rather than simply to work harder. We demonstrate that critical thinking can improve the identification of unreasonable estimates and, in doing so, we provide new directions for addressing audit quality issues.     

Use of intrinsic and extrinsic cues to assess textile product quality*

Use of intrinsic and extrinsic cues to assess quality of textile items was studied. Product-knowledgeable subjects rated the quality of socks and sweaters and completed a questionnaire which asked how they judged quality. Subjects relied more on product information (intrinsic cues), i.e., compositional features and performance properties, to assess quality than on price and warranty/certification seals (extrinsic cues). Significance lies in increased understanding of the process involved in quality assessment of textile items in the marketplace.     

Conceptual issues for integrated economic and social resource exchange theories*

The objectives of this paper are: (1) to contrast social and economic exchange assumptions, philosophies, reciprocities, valuation processes and problem-solving behaviours for purposes of clarification of social and economic decision situations and as a step toward theoretical integration; (2) to present the position that exchange theory would be more useful in family research if economic and social exchange theories were more successfully integrated; (3) to request the continued co-operation of family theorists in creating a theory which is useful in the interdependent social and economic domains of family life such as management; (4) to clarify the importance of this theoretical integration for more effective teaching and research in family resource management.     

Public Offerings of State-Owned And Privately-Owned Enterprises: An International Comparison

We compare initial offer prices in privatizations to initial prices in public offerings of private companies. The evidence indicates that government officials in the United Kingdom underprice IPOs significantly more than their private company counterparts. In Canada and Malaysia, however, the opposite is true. There does not appear to be a general tendency for privatizations to be underpriced to a greater degree than private company IPOs. We provide additional evidence on the determinants of privatization initial returns. Our findings indicate that initial returns are significantly higher in relatively primitive capital markets and for privatized companies in regulated industries.     

Resource use: the complexity of time and energy management in clothing maintenance

The research study examined time management and energy consumption with respect to clothing care. The investigation analysed data and information obtained in the NE-113 Family Time-Use Study collected in 1977–1978. Differences were found between urban and rural households and among different states. Occupational types of home manager, day of the week, education and age of children were variables accounting for differences in clothing care activities. The results have significance for a better understanding of how modem households meet the demands of clothing care management.     

DOES FINANCIAL MARKET DEVELOPMENT STIMULATE SAVINGS? EVIDENCE FROM EMERGING STOCK MARKETS

This paper examines the empirical relation between financial market development, as measured by the stock market, and gross private savings rates in 16 emerging markets over 1982-1993. With data from all 16 countries, there is evidence of a significant positive relation between savings and stock market size and liquidity. When countries with outlying values for the stock market measures are excluded, however, all significance disappears. The results suggest that a growing or deepening stock market will not necessarily be associated with higher savings rates. ( JEL E21, 016)